Name of the Project
Risk Mitigation Independent Power Producer Procurement Programme (RMIPPPP).
Location
South Africa.
Project Owner/s
Department of Mineral Resources and Energy (DMRE).
Project Description
The RMIPPPP, also known as the ‘emergency’ procurement round, is a response to the short-term electricity supply gap identified in the Integrated Resource Plan 2019.
The objective of the RMIPPPP is to not only alleviate the current electricity supply constraints but also reduce the use of diesel-based peaking electrical generators.
The programme aims to procure 2 000 MW from a range of energy sources and technologies.
The DMRE issued a request for proposal for the RMIPPPP in August 2020.
Mineral Resources and Energy Minister Gwede Mantashe released the names of the eight preferred bidders on March 18, 2021:
- the 150 MW ACWA Power Project DAO – a hybrid facility comprising solar photovoltaic (PV) and a battery energy storage system (BESS);
- a 450 MW Karpowership SA Coega facility – a gas-to-power plant based on imported liquefied natural gas (LNG) – in the Northern Cape;
- the 450 MW Karpowership SA Richards Bay facility – a gas-to-power plant, based on imported LNG – in the Northern Cape;
- a 320 MW Karpowership SA Saldanha facility – a gas-to-power plant, based on imported LNG – in the Northern Cape;
- the 198 MW Mulilo Total Coega facility – a hybrid plant employing solar PV and imported LNG;
- the 75 MW Mulilo Total hydra storage project – a hybrid facility comprising solar PV and a BESS;
- the 128 MW Oya Energy hybrid facility – a hybrid facility comprising solar PV, wind and a BESS, in the Northern Cape; and
- the 75 MW Umoyilanga Energy – a hybrid facility comprising solar PV, wind and a BESS, Northern and Eastern Cape.
Umoyilanga Energy will operate as a virtual power plant, combining generation from two sites that are 900 km apart. Avondale, in the Northern Cape, will include 115 MW of solar PV and 30 MW of battery storage, while Dassiesridge, in the Eastern Cape, will incorporate 63 MW of wind and 45 MW of battery storage.
To meet its 75 MW dispatchable profile, Dassiesridge will charge batteries from the wind energy at night and discharge power in the morning until the sun rises. The solar installation at Avondale will supply the bulk of the energy during the day, supplemented by wind energy from Dassiesridge. Excess solar energy will be used to charge the batteries at Avondale, which will discharge after sunset.
In June 2021, the DMRE announced the appointment of three additional preferred bidder projects under the RMIPPPP, following the completion of “value for money” negotiations with Norwegian renewables power producer Scatec.
To meet the dispatchable profile demanded under the RMIPPPP, the three projects – Kenhardt 1, Kenhardt 2 and Kenhardt 3 – will together produce 540 MW of solar and 225 MW/1 140 MWh battery storage.
Scatec has indicated that the projects are the only ones selected under the RMIPPPP that rely exclusively on renewable energy, making the three-project portfolio arguably one of the biggest single-site solar-storage hybrids in the world.
The projects will include average local content of 50% during construction, South African entity participation of 51% and black ownership of 41%.
Potential Job Creation
The Oya Energy hybrid facility and Umoyilanga Energy will contribute 3 966 job-year opportunities in the construction and operation of these power plants.
Capital Expenditure
The combined investment value of the initial eight projects is estimated at R45-billion.
The Oya Energy hybrid facility and Umoyilanga Energy projects have a combined investment value of R14.6-billion.
Planned Start/End Date
The Oya Energy hybrid facility and Umoyilanga Energy projects are expected to be online from 2025 onwards.
Umoyilanga Energy is expected to achieve financial close by the second half of October 2023, with construction starting immediately thereafter to achieve commercial operations in May 2025.
Latest Developments
Two more preferred bidders selected as part of the much-delayed RMIPPPP have signed project agreements signalling legal close and have until December to reach financial close.
The projects are the Oya Energy hybrid facility, proposed for development in Matjiesfontein, which straddles the Northern and Western Cape provinces, and Umoyilanga Energy, across two sites at Avondale in the Northern Cape, and Dassiesridge in the Eastern Cape.
The DMRE said in a statement in August that the Oya project would be developed by G7 Renewable Energies, ENGIE, Meadows Oya Energy and Perpetua RMI4P, while the Umoyilanga project was being developed by EDF Renewables and Perpetua Holdings.
The project will meet the programme’s production profile of being able to dispatch electricity between 0:00 and 21:30.
Should the projects progress to financial close, they will join the three Scatec projects appointed in June 2022, which are the only RMIPPPP projects to have entered construction to date.
The Scatec projects are currently in construction, and are set to reach commercial operation in November 2023.
Despite delays to the RMIPPPP, the programme has remained active and Karpowership, which secured 1 200 MW of the RMIPPPP's 2 000 MW allocation across three projects, has expressed optimism that its projects could also close soon.
However, Electricity Minister Kgosientsho Ramokgopa insists that South Africa is unwilling to enter a power purchase agreement with the floating gas-to-power generators for more than five years. However, he has not yet indicated how government intends shortening the 20-year period extended to the hybrid projects for the powerships.
Key Contracts, Suppliers and Consultants
Scatec (Kenhardt 1, Kenhardt 2 and Kenhardt 3 ); G7 Renewable Energies, ENGIE, Meadows Oya Energy and Perpetua RMI4P (Oya Energy hybrid facility) and EDF Renewables and Perpetua Holdings (Umoyilanga Energy).
Contact Details for Project Information
DMRE, Natie Shabangu, email natie.shabangu@dmre.gov.za; or Thandiwe Maimane, email thandiwe.maimane@dmre.gov.za; mediadesk@dmre.gov.za.